On Wed 26.7.17, Revenue Minister Kelly O’Dwyer announced that the Government has established a transition team to bring the Australian Financial Complaints Authority (AFCA) into being. AFCA is designed to provide a one-stop-shop for external dispute resolution, as recommended both by the Ramsay Review and the report of the Small Business and Family Enterprise Ombudsman. AFCA is due to be operational by 1 July 2018.
The new Authority will have an independent arbiter and provide compensation where appropriate. It will replace the current system which comprises the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO), and the Superannuation Complaints Tribunal (SCT). Former Reserve Bank Assistant Governor Dr Malcolm Edey will lead the transition and the transition team.
Consumers will be able to approach AFCA to resolve all financial complaints. Where complaints involve multiple issues, or multiple financial services providers, resolving those complaints will be smoother. Also, AFCA will be able to hear disputes of a significantly higher value.
Once legislation to establish the AFCA has passed the Parliament, the Minister said the focus of the transition team will shift to overseeing the operational transition from the existing schemes to AFCA.
Related to the creation of AFCA, the Government has asked the Ramsay Review to also consider the establishment, merits and potential design of a compensation scheme of last resort. This is to be considered along with the merits and issues involved in providing access to redress for past disputes. In May this year, the Ramsay panel publicly released a Supplementary Issues Paper for consultation. The Minister said the Ramsay Review will provide part 2 of its final report on these 2 issues to Government by early September 2017.
[Minister’s website: transcript of speech; LTN 140, 26/7/17]